Non-alcoholic beverage sector shows resilience

Posted by James Ferre on 18th February 2009

A new report reveals the impact of the economic downturn on the non-alcoholic beverage industry to-date as well as the outlook for coming years.

According to Euromonitor International’s latest 2009 Drinks data, the global drinks industry has proven to be quite strong given the prevailing economic headwinds. The soft drinks market showed an increase of 3.8% in total volume terms for 2008 and the hot drink market experienced a 2.9% increase in total volume terms. However, with the economic plunge during the last few months of 2008, the outlook for some drinks categories may not be as bright.

Further downturn of the economy threatens high unit price beverages over the course of this year. “Functional and value-added drinks are some of the first to feel the squeeze during this downturn as their phenomenal growth over 2007 and 2008 witnesses a slowdown in 2008,” Simon Maddrell, Head of Euromonitor International’s Global Non-Alcoholic Drinks Research, advised. “The Health and Wellness craze that prompted this growth may encourage consumers to accommodate these purchases or search for less expensive alternatives.”

According to Euromonitor, continued value growth, especially in the global soft drinks market going into 2009 will derive from Asia-Pacific, which is expected to increase by 5.1% over the 2008 and 2009 period. With the North American and Western European markets in decline other emerging markets are proving to be areas of opportunity as well, including Argentina and Turkey. “Both markets demonstrated high growth rates in carbonates between 2007 and 2009, a category that as a whole has been suffering from a steady decline,” Mr Maddrell said.